The U.S. dollar is again under pressure, as markets are anticipating a different scenario which contemplates higher interest rates next year in Europe and eventually in the U.S. U.S.: The saving’s rate to spike. Is the long consolidation of the dollar over? The decline of the greenback against major currencies and the Australian dollar/Canadian dollar in particular might be the beginning of a new leg down that could last until December. The decision of the Royal Bank of Australia to increase interest rates will eventually set a worldwide domino’s effect that could lead to higher rates, higher inflation and higher commodity prices next year. In reality, the world’s economic recovery is in motion, albeit it will be subdued by the long-lasting consumer deleveraging. The recession has changed the spending habit for one generation at least, considering that interest rates are set to rise substantially over the years, if history repeats itself. In fact, over 150 years, interest rates have shown the tendency to bottom roughly every 50/60 years (1900, 1945, 2000) and then to trend up for about 20/30 years. Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
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